Caution: Real Estate May SLOOOW!

Discussion in 'Real Estate' started by gugaplex, Jul 5, 2006.

  1. Grimreaper

    Grimreaper Active Member Original Member

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    I was channel surfin last night and saw C-span was doing a segment on high risk mortgage lenders so I watched it. Basically it appears that lending disclosures were kept so lax under the Bush regime that many fokes who bought since 2003 were basically forced into "indentured servitude" by da slick mortgage industry because o'da wave of ARM's in recent years. Banks were not required to even publish what the maximum payment could rise to anywhere on the mortgage documents for instance. Don't get me wrong...I still think that as a consumer you should be your own watchdog...but I can also see how many unsuspecting buyers may have been a tad "cloudy" about what would happen when that first rate adjustment occurs. Lots o'these loans were basically setup by the banks to insure that the borrower would be forced to refinance when the new mumphly payment went into effect...and to incur another round of rediculous fees to refi. That's almost criminal...but it is no surprise that it happened during a time when all restraints were cast aside by a govmint leadership that pulled out all stops to make sho da masses were kept under the ether of great economic conditions. The problem we will see going forward as outlined by one o'da guests on the show last night was that if home prices even slow marginally it will be impossible for many homeowners to refi out of these high risk loans because of bank equity requirements....plus the statistics about foreclosures of these types of loans will soon cause da new Congress to take a closer look at the practice...possibly tightening lending standards in da future. The rate of foreclosure for those who refi the initial loan actually doubles! Expect inventories of homes for sale to increase. The good news for new buyers is that the way to eliminate inventories is to either lower prices....or make the homes more affordable by lowering rates. I seriously doubt that the Fed can do anything but continue to lower rates at this point. There is no other choice just based on what is happnin in the RE mawket. :oops:

    Sidenote: A beeeyotch from WM was on the panel to give her side of the story from da lender's POV....of course she was agin more disclosure because she felt it "may actually limit a borrower's freedom of choice" :lol: Keep following WM over the next year...BIG trouble ahead for that POS. :wink:
     
  2. poornewb

    poornewb Member Original Member

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    Well maybe the smart people out there can seize the oppurtunity and buy up these forclosures and then RENT them back to the po po po dumb buyers.

    Gotta look at it from the bright side.

    Sometimes keepin up with the jones can really suck.
     
  3. Grimreaper

    Grimreaper Active Member Original Member

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    True enuff! Da problum I see is that da supposed "smawt people" think that the end is almost at hand for da RE mawket if you judge by all da banter on CNBC. Leads me to baleave there is very little diffrunce betwixt smawt fokes n po fokes mosta da time. :D
     
  4. poornewb

    poornewb Member Original Member

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    Only difference I see in the smart and the poor is money management and a little luck and timing!

    Hey dont think im saying its time to jump on the band wagon just yet. Im having a hard time getting people to beleive that the REIT market is still going down when here in Texas were still moving at our 2% pace. But my neighbor is in one of those arms and he's scrambling to get refinaced!

    HMMMM my first tenant possibly!!!
     
  5. Grimreaper

    Grimreaper Active Member Original Member

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    Freddie Mac reporting dat fo da week just ended:

    1) A 4.9% increase in the number of mortgage loan apps year over year as...

    2) The 30 year fixed rate @ 6.11% dropped to the lowest level since Jan and....

    3) The ave. new purchase mtg price jumped to $228K (since last report), a price dat was off by 6.7% from 1 year ago yet.....

    4) New purchase app mtgs were off by 13%+ from a year ago and refi mtgs were up 13%+.

    Conclusion? :arrow: "Mr Mort Gage-lender, 2 years ago when I was buyin this place you sent an appraiser out who told me :arrow: 'sure...it looks like a $275000 house to me, even though no house in this area ever sold for more than $250000, don't worry, we'll get ya finanaced'.......now that I want to refi out of my self adjusting ARM you are telling me you can't get me financed cause the equity/loan ratio is too low on this POS house I had to have at any price?!!" :shock: :lol:
     
  6. frusnak

    frusnak Active Member Original Member

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    I have had three mortages and each one was fixed rate. My heloc is adjustable but I'm not using, just wanted a line of credit before the bottom fell out of the housing market. ARMS just scare me. :shock: :twisted:
     
  7. Im Not Warren Buffett

    Im Not Warren Buffett Active Member Original Member

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    One interesting thing I've noticed is that alot of the real estate ad links you see on the front page bring you to a long line of "just reduced" homes. I think that is a sufficient barometer for the slowdown...
     
  8. frusnak

    frusnak Active Member Original Member

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    There is a market for homes in the $150,000.00 and lower market. The high end homes $325,000.00+ homes are really slow, at least in my area.
     
  9. Grimreaper

    Grimreaper Active Member Original Member

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    I wassa watchin an episode o'Flip Dat House yesterday and it did nuthin but verify my contention dat fokes in Cali are retarted! :lol: These 2 clowns bought a 900 sq ft woodframe "teardown" house in Rio Rivera (sumthin like dat) for $325000!!! :shock: :lol: :lol: Then they sank a whole chitload o'cash into renovations and thunk they wassa gonna make $$$ on it. The very next show was about a couple who bought another 900 sq ft piece o'crap in Sunland for $400K and then sank $80K into it in hopes of selling it for $510K!!! :shock: The only thing that could possibly solve planet California's situation would be a giant sunami. :roll:
     
  10. Grimreaper

    Grimreaper Active Member Original Member

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    I'm sure I sound "abrupt" when I say the biggest morons on da planet live in Cali. I found this site today :arrow: www.flippersintrouble.blogspot.com

    Check it out and you will see why I say it. :lol: I see 4 Malibu homes burned taday but in order to rectify the situation I think sumthin mo drastic will be needed...jist my opinyun though. :roll:
     
  11. poornewb

    poornewb Member Original Member

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    What an awesome site hahaha that just goes to show that the "sheeple" as you call them just thinking they can still buy a home for retail and then jack the price up more for a profit. It used to work but not anymore!! Here in my area that practice wasnt too rampant except in maybe the higher end areas and the little towns that are booming but for the most part you had to and still have to buy them right to make a profit on a flip or rehab. Hooorayyy Texas!!
     
  12. Grimreaper

    Grimreaper Active Member Original Member

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    My suggestion to anyone looking to buy a home is to stick with a very low bid and wait fo da sellers to come to you. :wink:
     
  13. Grimreaper

    Grimreaper Active Member Original Member

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    Yet mo evidunce dat da fokes in Cali be loony....da contract David Beckham got to play soccer in the U.S.! :lol: Next highest salary? :arrow: Landon Donovan who makes less than $1 mil. :roll: I hope this experiment goes reeeeal badly fo da L.A. Galaxy.....actually....bring on da giant sunami dat'll wipe out Cali soon! PLEASE!....trust me....stawtin aaaaall ova would be the best thing dat could happen to you fokes in Cali. :roll: :lol:
     
  14. Grimreaper

    Grimreaper Active Member Original Member

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    Hmmmm...if you were to look at summa da RE lenders you would think dat perhaps the werst was not yet ova fo RE. Of course TOL is still $10 above the 52 week low (but 20% below where it was when Cramer said the bottom for RE was in! :lol: ) so maybe TOL and summa da udder homebuilders will have to make new lows before it becomes obvious to everyone. In situations like this, ifn you own a homebuilder my advice is :arrow: PANIC EARLY!!...AVOID THE RUSH!!! :shock: :lol:
     
  15. gugaplex

    gugaplex Member Original Member

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    Good point there Grim. Baby-Boomers leaving to set-up shop in FLA will be excellent for TOA, the home-builder that does most of its biz there.

    TOA trades at less than half of net-working capital. With the internet age, it will be difficult to find a better value than this, as folks will screen these stocks and jump on them faster than a slut on a cucumber....
     
  16. Im Not Warren Buffett

    Im Not Warren Buffett Active Member Original Member

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    That gratuitously graphic image aside, I mentioned this another time - most of the "working capital" is inventory, which can hardly be considered a liquid asset when its real estate in a down market. Use the acid test ratio and a different story emerges... buying companies at the trough of a downturn is a great idea, and real estate and related companies will be there soon - but part of the cycle is that the weak companies get shaken out. I just don't think TOA is one of the stronger companies.
     
  17. Grimreaper

    Grimreaper Active Member Original Member

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    :lol: :lol: Ooooh maaaan! Da news on BZH!! :shock: Nice! :lol: Looka BZH in da wild wild west ov afterhours tradin! I'm not sho who it was but sumbudy said :arrow: "The markets hate uncertainty" :? But instead of being uncertain, let's "fanatasize" instead....like what if BZH really was in wit a lender anna appraiser on a scam while da housing muny spiggots were open? :shock: WOW! Now that would be neat!....specialy if like 3 er 4 udder builders and about a haffa duzen udder lenders wassa doin they own thang. :oops: I'm wreckin da news would eventually hit even da evil empire ov GS. :oops: :oops: Oooooooh....scaaaaaaaaary. :lol:
     
  18. Im Not Warren Buffett

    Im Not Warren Buffett Active Member Original Member

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    The other day on my site I wrote an article about why I'm optimistic about BLDR, as I think the housing market has bottomed. My play on housing here was NVR, which (in the 4/20 spirit) rolled and smoked estimates.
    As I talked to Geb about this one on Monday, it was at $700 with three failed attempts to break through $735. The 16% short interest - which would take 12 days to clear - was also a compelling data point. NVR was the best housing stock in a hated sector with earnings coming up, and also a short squeeze play. The stars aligned, and NVR had a nice intra-day spike to $860. Granted, I got out closer to $800, but it was still a nice trade for me. :eek:

    Bullish on housing... :shock:
     
  19. Grimreaper

    Grimreaper Active Member Original Member

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    Kewel!...we'll use the stock I used ta splain how da housing stocks spotted da top in RE bafo RE spotted da top in RE....which was mentioned in my article at Geb's site...the same article dat shoulda gotten me "published" since the info-may-shun was most definutly deservin ov sum kinda prize in bidness jurrnalizm. :? Da stock? :arrow: TOL...at 29.50 ta be exact. :wink: ....which is midway betwixt where it was when Cramer called da bottom in RE....and where it ended up afta his call created the top o'da reflex afta da foist wave down! :lol: The low was 22.22...Cramer pumped from $25 thru $32....the high was 35.64....you are in at 29.50!....good luck! :lol:
     
  20. Grimreaper

    Grimreaper Active Member Original Member

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    Sheeeyot....no wunder Dubya B likes BLDR....it just did a 2 day gapup ala OVTI's recent ackshun! :lol: Jinxie 1....meet Jinxie 2!!! :lol: